Gold up on day, but end below $1,270 highs; Platinum leads Friday’s losers

SAN FRANCISCO (MarketWatch) — Gold prices on Friday tallied a five-week gain of 5% as losses in U.S. equities helped lure investors to the perceived safety of the precious metal.

Prices, however, finished well off the session’s high after hitting a technical resistance level.

Gold for February delivery
US:GCG4
rose $2, or 0.2%, to settle at $1,264.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices finished well below the day’s high of $1,273.20, but the settlement was still the highest since Nov. 19, according to FactSet data tracking the most-active contracts.

For the week, prices gained 1%. Including the climb over the past four weeks, they’ve added about 5% since the close of $1,203.70 on Dec. 20.

March silver
US:SIH4
closed down 24.5 cents, or 1.2%, to $19.765 an ounce — around 2.7% lower than last Friday’s close.

Resistance at the $1,270 level for gold kicked in, which briefly pushed prices lower, said Naeem Aslam, chief market analyst at AvaTrade. Also, there aren’t many traders who will like to carry their positions in the weekend, he said.

Gold on Thursday climbed 1.9%, riding not only the retreat stocks, but also a weaker dollar
DXY, +0.07%
and the prospect of India easing curbs on imports.

“The existing pullback in equities markets has led to some ‘safe-haven’ buying, the potential for an increase in gold imports to India if they lower the import duty, along with efforts in Europe to continue their own quantitative-easing policies are all supportive of gold at the present time,” said Jeffrey Wright, managing director at H.C. Wainwright.

Wright said he expects gold prices next week to trade in the $1,250-to-$1,300 range.

The SPDR Gold Trust exchange-traded fund
GLD, +0.63%
broke through levels on Thursday not seen since Dec. 10 and moved well above its 50-day moving average. Read more on The Tell. The ETF was little changed at last check, trading up 0.8% for the week.

Precious-metals funds saw their first inflows in 19 weeks — $33 million — in the week ended Wednesday following a big year-to-date outperformance of junior gold miners, Bank of America Merrill Lynch strategists said in a note dated Thursday. The Market Vectors Junior Gold Miners ETF
GDXJ, +1.90%
traded down 2% on Friday, but it has climbed around 17% year to date.

Also, the market has seen a big inflow for the so-called gold spider ETF, said Aslam, but investors have to be “cautious and quick” in taking profits because if the Federal Reserve announces further tapering of its bond-buying program at its meeting next week, the dollar could soar, which would be a bearish sign for gold.

The Chinese lunar new year is also playing its part for physical metal demand, as “customers are rushing in to grab the metal at a cheaper price,” he said. It’s a Chinese tradition to give gold over the holiday. Prices have gained around 5.2% year to date, but that’s after a 28% drop last year.

Still, some analysts are skeptical about gold advancing further.

In a note dated Thursday, analysts at Barclays said they believe an “environment of modest [economic] growth, fewer tail risks and a stronger dollar increases the scope for further disinvestment in gold as the opportunity cost of holding the metal rises.” They recommend selling gold into any rallies, particularly, data-led rallies.

Separately, platinum for April delivery
US:PLJ4
on Friday dropped $34.60, or 2.4%, to end at $1,428.60 an ounce. It’s down 1.8% for the week, but gained over the past two sessions amid a labor strike in South Africa.

“The radical AMCU union, which represents the majority of workers in the platinum mining industry, is demanding that wages be more than doubled,” said Commerzbank’s Eugen Weinberg. “The strikes are to continue until such time as these demands are met. This could noticeably tighten the situation on the global platinum market.”

Elsewhere in metals trading, March palladium
US:PAH4
lost $11.10, or 1.5%, to $734.80 an ounce, down 1.8% on the week. High-grade copper for March delivery
US:HGH4
shed more than a cent, or 0.4%, to $3.27 a pound, losing around 2.2% from a week ago.

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